SOA Sdn Bhd produces electronic components on a job order basis. The companyoperates two service departments and two production departments. Manufacturingsupport costs and normal activity levels for each department are given below:DepartmentsItemPersonnelMachining Maintenance AssemblySupport Costs (RM)100,000400,000200,000300,000Number of employees5540Maintenance hours1,5007,5001,000Machine hours10,0001,000Direct ļabour hours1,00010,000Support costs of the service department are allocated on the basis of employeesand maintenance hours.REQUIRED:(a)Allocate the service department costs to the production departments usingthe direct method.Allocate the service department costs to the production departments usingthe sequential method.(b)(c)Allocate the service department costs to the production departments usingthe reciprocal method.(Round up your answers to the nearest RM)

There are various methods available for allocation of service Department Costs. Direct method of…

REQUIRED: (a) Allocate the service department costs to the production departments using the direct method. (b) Allocate the service department costs to the production departments using the sequential method. (c) Allocate the service department costs to the production departments using the reciprocal method.

REQUIRED: (a) Allocate the service department costs to the production departments using the direct method. (b) Allocate the service department costs to the production departments using the sequential method. (c) Allocate the service department costs to the production departments using the reciprocal method.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 1CMA

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